A couple recent items caught my eye with regard to the issue of employee adoption of social software.

In Reversing the Enterprise 2.0 Pricing Model, Julien le Nestour argues that pricing per user for social software should increase as more employees use it, because the network effects of higher participation make the software more valuable. It’s a great theoretical piece, tying pricing to value received. But in the harsh budgeting realities of the enterprise and in the comparison against other software pricing models, it’s not likely we’ll see anything like this.

Atlassian, maker of the Confluence wiki and developers tools, recently passed the cumulative revenue mark of $100 million. In the post announcing this milestone, Atlassian blogger notes that the company has no sales force. People just download the app. I know some of the Atlassian guys, and this kind of viral, bottom-up adoption is core to their philosophy. They don’t sell to upper management, adoption occurs at the departmental level. That being said, I am aware from my work at Connectbeam of some large-scale rollouts of the Confluence wiki by Fortune 500 companies.

What connects these two items? The first post describes the nature of Enterprise 2.0 apps and how their value increases as more employees use them. The second post points to the value that departments have received from Atlassian’s Confluence wiki, even without broad adoption. In other words, network effects are not a critical aspect of the Confluence value proposition.

From these posts, other readings and direct customer experience, the following occurred to me:

You don’t need a high level of adoption to get value from some Enterprise 2.0 apps. Others require broad participation.

In some ways, that may seem obvious. Yet I don’t tend to hear this distinction being made. Usually, all social software is lumped together under ‘Enterprise 2.0’ and there is a collective view that wide-scale adoption by employees is a necessity. It’s actually more nuanced than that.

Varying Adoption Levels Required

The graphic below depicts the relative levels of participation required for different apps to “deliver value”:

Moving from left to right, the percentage of employees involved gets higher

This graph has a couple of implications for Enterprise 2.0 vendors. Before that, here’s an explanation for why I put the different applications where I did.

Consider the Purposes of the E2.0 Applications

Before discussing these applications, I want to note this. All social software applications get better with higher adoption. There is no disputing that. The distinction I want to make is that some apps require increased participation before they deliver value.

Blogs: The nature of a blog is a single person’s thoughts, observations and ideas. Inside companies, these applications can be tools for the ongoing recording of things that fall outside the deadlines and process-oriented activities that make up the day. Making them public is a great way to share these contributions with other employees and establish your record of what’s happening. If only a few key people blogged inside a company, there will be value in that.

Wikis: Wikis actually have two purposes: (1) knowledge repositories, and (2) projects and collaboration. It’s that second purpose that makes wikis particularly valuable even with small participation. I’ll use Confluence as an example. We use it as our low home for putting up documents accessible to anyone else, and for free-form contributions on all manner of things. It is very much a utilitarian use case for us. If we weren’t using Confluence for this purpose, we’d share documents via email. In larger organizations, Confluence may replace usage of SharePoint or the company portal.

Using wikis as knowledge repositories, such as [Company Name]-ipedia type of implementations, requires a larger percentage involvement. Sparsely populated company versions of Wikipedia are of little use. As are wikis that are not updated regularly with new information. I’d put wikis-as-knowledge-repositories up there around prediction markets in terms of required participation.

Forums: The old man of Enterprise 2.0…forums. These are the place where topics can be posted, and a scrum of conversation occurs. To really get value out of these, it helps to have larger participation. Blogs are solo voices with interesting content. Wikis can have a very specific collaboration purpose among a few employees. Conversations around a topic require a wider variety of voices. Otherwise they fail to give people a sense of what others are thinking. Nothing sadder than forum post with no comments.

Social bookmarking: Bookmarking sites you find useful has value by itself. So in that sense, “social” bookmarking can work for very few employees. But it’s not really “social”, it’s simply a replacement for your browser bookmarks. You get value by finding those gems your colleagues deem interesting. The odds that any single bookmark will be useful to you are small, so you need a healthy amount of bookmarks to increase the chances of finding links that will help you. And to get a healthy amount of bookmarks, you need broader participation.

Microblogging: In some ways, microblogging could be compared to forums. Both are public places to serve up topics. But they’re fundamentally different. And that’s why broader participation is more important here. Forums have a distinct purpose – the discussion of a particular topic. You need participation by those who know something around the topic. Microblogging is a more free-form, personal activity. You don’t need a distinct purpose to post something. You post all the things that occur to you during the day. Some of which will have value, although it can be hard to predict for whom. It also helps to know that people are seeing these posts, because there is a conversational aspect to microblogging. The free-form, who-knows-what-might-be-interesting, conversational aspect of microblogging require larger participation than forums do.

Prediction markets: Prediction markets thrive on having a variety of ideas, events and initiatives. They also require the different perspectives of employees, leveraging different perspectives, knowledge and experiences. This is true wisdom of crowds work. Limited participation limits the value of prediction markets. These benefit from broad employee involvement.

Social networks: I put these at the top of the chart in terms of employee involvement. Perhaps one of the best use cases for social networks is finding colleagues with the knowledge or interest in projects you’re working on. This requires large-scale participation. If a social network only is used at the departmental level, it doesn’t provide value. In terms of expertise location, you’re probably already aware of what others in your deparmtent know. It’s breaking out of that traditional sphere of contacts where social networks shine. I know I’ve heard many instances of large corporations suffering from “reinventing the wheel” syndrome because employees lack visibility about what others know. Broad participation addresses this issue.

Implications

Three implications of this view about required involvement come to mind.

Greater required participation correlates to greater impact on a company’s value: Generally, you could change the metric in the chart above from percentage of employee involvement to impact on company value. The increased participation means the associated application will also have a larger effect on the company’s strategies and operations. It’s not an tight correlation, but a general trendline. Exceptions will abound.

Top-down vs. bottom-up: General observation is that broader participation requires a greater amount of senior management support. That’s the way things work inside companies. Employees will listen when the executives of the company push something. For applications that need lower participation, the name of the game is to provide a compelling application with a low entry cost. Departmental budgets and the green-light from employees at lower levels of the organization are all that are needed.

Time for application to gain traction: With applications that require low levels of participation, there is plenty of time for the application to grow virally. It serves its purpose for a select few, and over time others will see the value and elect to participate. These apps can be resident inside companies for long periods of time. Those that require higher participation to see value will need to show results sooner. They are on senior management’s radar, generally cost more and have a greater number of employees who will be watching to see the results.

So it matters what type of application we’re talking about when it comes to Enterprise 2.0. It matters for companies and vendors. It impacts the skills required for everyone’s success.

One of my alerts is for ‘Enterprise 2.0’. I’m doing a pretty good job of staying on top of things in the Enterprise 2.0 Room on FriendFeed, but the Alerts are good back-up. And Google Alerts are the most common keyword notification service that people use.

So this is my question: what determines the links we see in those daily Google Alerts?

I ask this because of a recent experience with a well-received blog post that was not included in the ‘Enterprise 2.0’ Alerts. Compared to another post that did make it in to the Google Alerts, I find myself mystified as to what algorithm Google is using to generate its Alerts.

It’s not to say that Google Alerts don’t deliver some good posts – they do. But they seem to miss the mark pretty often as well, as the quotes at the start of this post show. I’ll relate my own experience below, based on objective factors, as opposed to my own declaration that “It was good post dammit!”😉

Tale of Two Blog Posts

I checked the Google Alert of January 18 for Enterprise 2.0. Here’s what I saw (my red highlight added):

The highlighted post is a schedule of Web 2.0 sessions for Lotusphere 2009. If you’re into Lotus, good stuff. One session at Lotusphere was titled “INV101 – From Web 2.0 to Enterprise 2.0: Collaboration, Productivity, and Adoption in the Enterprise”. Hence, its inclusion in the Enterprise 2.0 Google Alert.

I use that entry as a contrast to a post I wrote on the Connectbeam blog, titled Three Silos That Enterprise 2.0 Must Break. It’s a post that pushed some definitions of what a silo is and where knowledge management needs to move to. It was well-received, with a number of attention signals like Del.icio.us bookmarks and tweets.

And you’ll notice it’s not listed in the Alerts email above, or in any earlier ones. It was included in my ‘Connectbeam’ Google Alert. So I know Google had indexed it in its blog database. But it was not in the ‘Enterprise 2.0’ Google Alert. Which got me to wondering, what does it take for a post to make into the daily digest of Google Alerts?

I put together a comparison of the two posts: the Lotusphere post, and the Connectbeam Three Silos post. I wanted to see where the Connectbeam post falls short. Take a look:

The table above includes some typical Google attributes: PageRank, term frequency, links. It also includes the next generation of content ranking: comments, bookmarks, tweets and Google Reader shares. On either basis, it’s surprising that the Lotusphere post made the cut, while the Connectbeam post didn’t.

So I’m still trying to figure out what makes the difference here. Clearly, the Three Silos post struck a bit of a chord in the Enterprise 2.0 community. I know this not because of links by other bloggers (although they were there), but by the other Web 2.0 ways people communicate what’s of value to them.

How about it Google? Time to update your algorithms to include attention signals from our growing use of social media?

The enterprise 2.0 space saw good action this year. I’ve had a chance to see it up close, starting the year with BEA Systems (now Oracle) and closing out the year with Connectbeam. I think it’s fair to say that in 2007, social software was still something of a missionary sale. In 2008, company inquiries increased a lot. The burden still falls on the vendors to articulate business benefits, adoption strategies and use cases. But enterprise customers are now partners in this work.

So let’s get to it. Here are my top ten stories for the year:

1. Activity Streams

Facebook really got this going with its newsfeed, and FriendFeed took it to an art form with its lifestreaming service. In 2008, many vendors added activity streams to their applications: Connectbeam, BEA Systems, Atlassian, SocialText, Jive Software and others. Activity streams are great for improving awareness of colleagues’ activities, and adding a new searchable object: actions.

2. Forrester’s $4.6 Billion Forecast

Forrester Research made a splash with its forecast that Enterprise 2.0 will be a $4.6 billion market by 2013. The ReadWriteWeb story about it has been bookmarked to Del.icio.us 386 times and counting. Forrester’s projections provided a solid analytical framework for the different tools, used internally and externally. According to the analysis, social networking will be the most popular tool for companies. Whether you buy the forecast or not, they remain the best-known, most visible numbers to date.

3. Oracle Beehive

Larry Ellison is fond of essentially dismissing SaaS. He does not have Oracle invest much in the trend. But Oracle did seem to embrace Enterprise 2.0 in a big way this year with Beehive, which is an “integrated set of collaboration services.” The New York Times quotes Oracle EVP Chuck Rozwat: “It is a product we built from scratch over the last three years.” Now since Oracle is a huge enterprise software company, there’s plenty of skepticism about the capabilities and innovation of Beehive. But there’s no denying that Oracle has the ear of the enterprise, and picks up a lot of market intelligence through its customer base. While Beehive itself may or may not succeed, the idea that Oracle came out with Beehive was a big story.

4. AIIM/McKinsey Surveys

Research and consulting firms AIIM and McKinsey each came out with surveys of corporate interest in enterprise 2.0. The AIIM survey looked at levels of awareness and interest among different Enterprise 2.0 technologies. AIIM also took a fairly expansive view of social software. The top 3 “Enterprise 2.0” technologies in terms of corporate awareness? Email, instant messaging, search. That’s actually a funny list, yet there are lessons there for vendors and consultants in the social software industry. If those are entrenched, can you play nicely with them? One other quote I like from the report:

This study of 441 end users found that a majority of organizations recognize Enterprise 2.0 as critical to the success of their business goals and objectives, but that most do not have a clear understanding of what Enterprise 2.0 is.

McKinsey’s survey of enterprises looked at the interest in various tools as well. It also asked respondents what the leading barriers were for success of social software initiatives. Top three were: (1) Lack of understanding for their financial return; (2) Company culture; (3) Insufficient incentives to adopt or experiment with the tools.

5. Facebook Co-Founder Leaves to Start an Enterprise 2.0 Company

Facebook co-founder Dustin Moskovitz and colleague Justin Rosenstein announced they were leaving the hot consumer social network to start a new company. The new company will “build an extensible enterprise productivity suite,” with the goal of “making companies themselves run better.” Why would these young guys, sitting on top of the leader in consumer social networking, choose to exit? As I wrote at the time:

The Enterprise 2.0 market is still quite nascent and fragmented. Combine that industry profile with projected spending in the category, and suddenly you understand why these guys are striking out on their own.

Assuming they’ll be able to tap the mother ship for help, I think this was a fairly important story this year.

6. Microblogging Enters the Enterprise

Joining wikis, blogs, social bookmarking and other incumbent tools this year was microblogging . Given the way Twitter is used by Enterprise 2.0 aficionados, and is enjoying skyrocketing popularity, it’s no surprise we started seeing microblogging emerge for internal use. At the mostly consumer-focused TechCrunch50, enterprise microblogging start-up Yammer won the top prize. Other start-ups in the category include SocialCast and Present.ly. SocialText added microblogging with its release of Signals.

Gartner’s Magic Quadrant is probably the iconic piece of analyst research. With its visibility and status, it also has enormous influence on vendor sales opportunities, especially when it comes time for IT buyers to draw up the all-important vendor short lists.

So it was with great interest when I read that Gartner had narrowed the criteria for whom it puts in the Magic Quadrant:

Added blogs and wikis to the functionality requirements

The effect of that is to establish those two tools as the de facto standard for enterprise social software inside the enterprise. To the extent corporate buyers are listening to Gartner for signals about the market, this will make it a bit more challenging for start-ups with interesting offerings that address other parts of the social software market. Yammer, for instance, won’t make it into their Magic Quadrant.

8. Enterprise RSS Fails to Take Off

RSS is one of those technologies that you know has huge value, and yet continues to struggle for awareness and adoption. Google tracks the leading “what is” searches. The fifth most popular on its list? “What is RSS?” Take that as both good and bad. Good that people want to know, bad that awareness continues to be a struggle.

Forrester analyst Oliver Young has a sharp write-up that shows enterprise RSS did not expand inside companies as many had thought it would this year. As he notes:

Of the three enterprise RSS vendors selling into this space at the start of 2008: KnowNow went out of business completely; NewsGator shifted focus and now leads with its Social Sites for SharePoint offering, while its Enterprise Server catches much less attention; and Attensa has been very quiet this year.

RSS is a great way to distribute content inside companies, but its ongoing limited adoption was a big non-story for the year.

9. IBM and Intel Issue Employee Social Media Guidelines

IBM and Intel each established guidelines for their employees who participate in social media. As I wrote, this essentially was a deputization of employees as brand managers out on the web. These market leaders were essentially saying, “have at it out there on blogs, social networks, Twitter, etc. But make sure you know the company’s expectations.” These guidelines represent a milestone in large enterprises’ comfort with social media. I expect we’ll see more of this in 2009.

10. The Recession

This affects all industries, globally, of course. And Enterprise 2.0 is no exception. Jive Software made news with its layoffs, but the effect was industry-wide. And of course, corporate buyers aren’t immune either. It’s a time for companies to hunker down, get slimmer, more focused and creative than they are in flush times. This recession will be a marvelous test for the resiliency of the Enterprise 2.0 sector.

Those are my ten. Did I miss a big story for 2008? Add your thoughts in the comments.

If you’re interested in tracking what happens in 2009, I encourage you to join the Enterprise 2.0 Room on FriendFeed. It is a centralized location for tweets and Del.icio.us bookmarks that specifically relate to Enterprise 2.0.